Economists see ‘jobless recovery’ (if they see any recovery at all!)

Layoffs and plant closings continue to ravage the country despite some tentative signs things may be stabilizing on Wall Street. Since January 2001, 1.5 million manufacturing jobs have been eliminated in the U.S. -- an average loss of 83,000 jobs a month.

Unemployment rates remain stuck around 6 percent and long-term unemployment is the worst it's been in a decade. Nearly 2 million people have been jobless more than 26 weeks and by June, 900,000 workers had run out of regular and extended unemployment benefits this year.

For those still working, average wages rose at an annual rate of 2.6 percent, the slowest rate recorded since 1995. With inflation running at 3 percent, “real wages” (workers’ actual buying power) has fallen 0.4 percent this year.

Global trade poses still more trouble for the economy. The U.S. trade deficit hit a record-high $37.6 billion in May and is on pace to balloon 16 percent this year. That means more American jobs will be lost as imports swamp exports, driving the U.S. even deeper in debt to foreign lenders to the tune of $1 billion a day.

The state of U.S. nursing homes, and what you can do to improve them

The Alliance for Retired Americans has published a comprehensive report on the state of U.S. nursing homes, complete with case studies of campaigns in eight states to protect residents and improve the quality of care.

There are 1.6 million people today living in 17,000 nursing homes and the number of residents are set to explode with the aging of the “baby boomers.”  One in four people over the age of 25 will spend at least some time in a nursing home, the ARA study found.

Campaigns to protect patients and improve care should focus on expanding the number of trained nurses and persuading the states (which are responsible for inspecting and certifying nursing homes) to strengthen their programs and hire more inspectors.

The full 84-page report is available at: http://www.retiredamericans.org/nursinghome.htm

Wall Street crash would have creamed a privatized Social Security system

A new research paper asks a simple question: In light of the Wall Street downturn, what would have happened to people’s Social Security benefits if the system had been privatized for the past four years?

Economist Dean Baker looked at two scenarios favored by advocates of privatization and found:

• If workers had invested 2 percent of their share of the Social Security fund in individual retirement accounts since 1998, total losses would have exceeded $31 billion. 
• If workers had invested 5 percent of their share of the Social Security fund in individual retirement accounts since 1988, at least $78 billion would have been lost.

“Advocates of investing Social Security money in the stock market never considered the issue of timing, even when it was quite apparent that the stock market was experiencing a bubble,” he wrote.

Some people would have gained, however. “The money that would have been lost would have been transferred to the individuals who hold the stock …the richest 1 percent of stockholders who own 37 percent of stock and the richest 5 percent who own 65 percent,” Baker added.

The study by the Center for Economic and Policy Research is on the Internet at: cepr@cepr.net

Newly passed special breaks cut corporate taxes to a near-record low

Newly passed tax breaks are pushing corporate tax rates to their lowest levels since the dawn of the Reagan administration, and their second lowest level in more than 60 years, according to a study by Citizens for Tax Justice.

Corporate tax rates will drop to 1.3 percent of the U.S. Gross Domestic Product this year and 1.4 percent next year, Congressional Budget Office and the Joint Committee on Taxation figures show. In contrast, corporate tax rates averaged 5.6 percent during WWII, 4.5 percent under presidents Truman and Eisenhower and 3.7 percent during the Kennedy and Johnson years.

Enron, Worldcom, General Motors and other corporate giants already paid few or no federal taxes before the latest round of tax cuts, CTJ observed. Thanks to tax breaks for stock options, offshore accounts and other shelters, Enron paid no income taxes during four of the past five years, Worldcom paid nothing two of the last three years and General Motors paid no taxes at all for three of the past five years, CTJ observed.

For the full report, go to: http://www.ctj.org/html/corp0402.htm